A digital payments revolution, shaped by member demands and disruptive competitors, is changing the credit union payment model. Two firms want to educate the marketplace on reducing the disintermediation risk.
Wethersfield, Conn.-based Payveris, an online and mobile digital payments company providing integrated payment solutions to banks and credit unions, entered into a consulting agreement with Elk Grove Village, Il-based Transaction Directory, which supplies information about the transaction processing market. Under the agreement, the educational program will highlight the benefits of offering financial institution money-movement services such as P2P in order to better compete with nonfinancial institution payment offerings.
As part of the agreement, Transaction Directory will assist Payveris by creating educational materials and market awareness programs through Transaction Directory's inventory of payments-related content.
"The trend in the marketplace is headed toward P2P money movement services," Marcell King, chief revenue officer for Payveris, explained. "This being said, financial institutions have had a difficult time gaining traction in the market when it comes to P2P and competing against nontraditional offerings such as those offered by Venmo, Google, Square and PayPal to name just a few. As consumers continue to adopt non-FI banking and payment services, banks and credit unions run the high risk of customer attrition and disintermediation. By working with organizations like Transaction Directory we are seeking to change that."
Payveris hopes to facilitate P2P transactions through its "SEND CASH" service via its PayItNow network. In March, Payveris announced a "Go Free P2P" campaign in an effort to unite with financial institutions to keep them at the center of the digital payments process. Through this campaign, the company is offering its P2P "SEND CASH" payment service via its PayItNow™ Network for free to institutions and industry partners that sign onto the service by the end of June 2015. The Pay it Now Network offers an alternative for credit unions by moving good funds in real time. Payveris' application moves money between financial institutions without using existing card rails.
Industry reports continue to demonstrate that consumers are already gravitated to digital payments so staying in the middle of the process is very relevant for credit unions.
The use of mobile phones to access bank accounts, credit cards, or other financial accounts continued to increase among adults in the United States last year, according to a Federal Reserve Board report, "Consumers and Mobile Financial Services 2015." As of December 2014, 39 percent of adults with mobile phones and bank accounts reported using mobile banking, an increase from the 33 percent a year earlier. The most common use of mobile banking remains checking account balances or recent transactions.
However, mobile payments are on the rise, according to the Fed study. Twenty-two percent of all mobile phone users made a mobile payment in the 12 months prior to the survey, up from 17 percent a year earlier. For smartphone owners who reported using mobile payments, the most common types of mobile payments were paying bills through an online system or mobile app, followed by making online or in-app purchases. Paying for a product or service in a store was the next most common type of mobile payment.
According to a recent survey by Synergistics Research, "Evaluating the Consumer Payments Market," online bill payment accounts for 37% of monthly bills paid, far outpacing checks at 22% of volume. Mobile bill pay accounts for 5% of bill payment volume, and online using tablets/e-readers represent 3%.
Payveris offers a full range of bill payment, money movement and interbank transfer capabilities. The company said its process is more than person-to-person payments, or business-to-business payment or person-to-business, Its financial institution-to-financial institution payments. It offers good fund transactions with an added bonus of a lower cost to serve combined with faster processing and a processed designed to keep the financial institution at the center of commerce.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
